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Liquor store owners resigned to legislation, but still plan to resist

Thomas Bailey Jr., James Dowd The Commercial Appeal, Memphis, Tenn. (MCT) • Jan 25, 2014 at 6:00 PM

Memphis wine merchants say they oppose plans unfolding in Nashville to open the way for wine sales in supermarkets.

While the proposed legislation offers wine shops a sweetener — the measure would bar megastores such as Walmart from stocking wine — the rift continues between Tennessee grocers and wine retailers.

Wine merchants don’t want supermarkets as rivals, while grocers support the measure but figure megastores like Walmart will topple any bill that bars them from the wine trade.

On Monday, retail liquor lobbyist David McMahan said the proposal in Nashville stood a chance of passing because it exclude megastores whose groceries are a side business.

“My first reaction when I read that: That will never fly,” said Rick James of the proposal that freezes out big-box stores. James owns four Cash Saver grocery stores in Memphis.

Efforts have failed for seven consecutive years to legalize wine sales in Tennessee grocery stores.

Keeping the megastores from the wine business was viewed as a compromise that favors liquor shop owners. Many liquor shops carry wine. James still views the compromise as wide of the mark.

“I think that (this latest) version of the bill may be as difficult or more difficult than the previous versions to get passed,” James said, noting megastores will probably fight the measure.

Many megastores are also major grocers. Walmart has become the nation’s leading grocer followed by Kroger and then Target, according to a 2013 ranking by the trade journal Progressive Grocer.

Walmart and Target did not respond Tuesday to a request for comments from The Commercial Appeal. Target spokesman Luz Varela said by email that the Minneapolis retailer is monitoring the Tennessee developments.

“Target currently sells beer, wine, spirits or a combination in 36 states where locally permitted as an added convenience for our guests,” Varela’s email says.

A Kroger spokesman wasn’t available Tuesday. But the Cincinnati-based grocery chain has put signs in its Memphis stores inviting customers to join the “campaign’’ to legalize supermarket wine sales. Kroger invites customers to visit redwhiteandfood.com/displays.

If the measure taking shape in Nashville passes, communities would have to approve wine in grocery stores. Referendums could be held in towns, cities or counties where voters have previously approved liquor stores and also have allowed liquor by the drink in restaurants.

Cash Saver’s James said that for decades the lines have been more and more blurred on the kinds of products different types of stores sell.

“Twenty years ago, you never thought about buying water at a hardware store,” James said. “The consumer now is willing to make a purchase at any retailer outlet at the time they want to make the purchase.”

The best time for buying wine is often when customers are buying the fish, steak or other food that will accompany the wine, James said.

However, Memphis-area liquor store representatives say that allowing wine sales outside package stores is a bad idea. Buster’s Liquors & Wines owner Rommy Hammond said Memphis will lose jobs if the bill passes.

While supermarket wine would likely cut into his business and lead to layoffs among Buster’s 45 employees, Hammond said, he’s more concerned about small operations with annual sales below his $8-million level.

“Look, we’ve been here 60 years and we’re not going anywhere, but I’m afraid that a lot of these Mom ‘N’ Pop stores will dry up if this goes through,” Hammond said. “From our standpoint, there’s nothing good about this.

Wine merchant Arthur Kahn, owner of Arthur’s Wine and Liquor at 5475 Poplar in East Memphis, said he believes the measure would undercut the state’s small business community and lead to the loss of jobs and local economic investment.

“A big issue is that there are 577 locally owned, independent liquor stores in Tennessee and the revenues from these small businesses recycle throughout their communities,” Kahn said.


Richard Locker of The Commercial Appeal’s Nashville bureau contributed to this article.

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